No changes for lottery money

Responding to a report criticizing Gilroy Unified’s use of lottery funds to pay for personnel, district officials say the money is supplemental only and big changes are not expected in terms of – how the money is used.
The report, completed by Joe Di Geronimo, a former superintendent and now interim administrator for business services for the school district, said in the report that Gilroy Unified, “has and continues to use lottery funds to cover ongoing costs in salaries and fringe benefits of personnel,” which he called a “poor fiscal practice.”
However, according to Keiko Mizuno, director of fiscal services for the district, the money goes to enhancing programs, and she does not expect to change much in the way lottery funds are spent.
“Everything they’ve budgeted and have been spending from the lottery is pretty much supplemental or an enhancement,” she said. “We already have cautious measures for lottery spending. I don’t think it’s going to be that many more changes.”
Di Geronimo said he has seen lottery funds available to school districts fluctuate as much as 30 percent from year to year, and that they cannot be counted on. He recommended the district phase out using lottery funds for personnel and instead draw from stable funds, such as the cost of living adjustment the state gives to districts each year.
“Too many districts use lottery money to cover salaries and fringe benefits,” he said. “The amount of money that comes in every year is not fixed. If you use the preponderance of your lottery money
to pay employees, and you have a 30 percent dip, you would have to lay people off.”
But that isn’t an issue the school district faces, because its lottery money goes to programs, according to Mizuno.
“We’re not funding teachers from the lottery and then have to cut the teachers,” she said.
The school district did experience a significant dip in funds from lottery sales after the 1995-96 school year. During that year, the district received more than $1 million, and the following year, it received $888,969 — a difference of more than $113,000.
Last year, lottery money paid for such things as district testing, the athletic programs for grades seven through 12 and district music programs. These programs have consistently received lottery funds for the past four years. Other lottery money has gone to replacing textbooks, Gilroy High School graduation and employee recognition.
Lottery money can be used for a number of things, including teacher salaries and instructional materials, according to Cathy Doyle Johnston, spokesperson for the California Lottery Commission. The money cannot be used to buy land or for buildings.
Doyle Johnston agreed that lottery money does fluctuate from year to year, making it hard for school districts to figure out how much money they will get.
“It’s obviously based on sales, and since that’s not a concrete figure, it fluctuates some,” she said. “They know they’re going to get lottery money, they just don’t know how much.’
For the most part, school districts can count on at least 34 percent of every lottery dollar, Doyle Johnston said.
“We’ve actually averaged about 38 percent,” she said.
How school officials spend lottery money is up to the school district, according to Mizuno. The California Lottery Commission does not recommend how school districts should use their funds.
“The only restriction we have with the lottery is we’re not supposed to use it for construction,” she said. “It’s going to be at the discretion of the school district. Some school districts treat it as part of the unrestricted general fund.”